In order to balance the books you have to source additional revenue or cut expenses somewhere – Joubert Botha from KPMG.
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SIMON BROWN: The question as to where we get it from. He must be contemplating tax increases, surely? A one percent increase in your Vat rate will bring in an additional R24 billion, but it will have an impact on poorer households and certainly not be accepted by the general public. Certainly there is a possibility for him to introduce a wealth tax, and even increase the inclusion rate for CGT – more for individuals. So there are opportunities there. I don’t think that that’s where the big money will come from but every bit helps.
Now, in order to balance the books, you bring in either additional revenue or you have to cut some expenses somewhere. I think the other element and place where our minister will have to look is where we can cut costs and expenditures – in particular our debt burden. I mean, 20 cents in every rand that we earn from tax revenues goes directly to our interest bill – which is huge.